Poland's PGE wants power capacity market in 2017

Warsaw (Platts)--26 Apr 2017 943 am EDT/1343 GMT

Polska Grupa Energetczna (PGE), Poland's largest utility, wants the government to introduce a capacity market this year so that its conventional units will receive support before proposed EU emissions standards take effect.

Polish generators oppose a proposal in the European Commission's Clean Energy Package, or 'Winter Package', that states that only generating units that emit up to 550 kg/MWh of CO2 would be eligible to receive support from a capacity market.

The Polish Electricity Association (PKEE), which includes the country's four state-controlled utilities, estimates nearly 28 GW of capacity in the country's electricity system, more than two thirds of the total installed capacity, would be excluded from support if the proposal took effect.

"The capacity market must be introduced as quickly as possible. It must come before the implementation of the EU's winter package and the 550 kg/MWH CO2 threshold," PGE's main specialist in its regulatory office, Agnieszka Radzimowska, told a Senate commission meeting.

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"The first auction would have to take place in 2017, before the end of the year, for conventional installations to take part in the capacity market...In the optimal scenario the capacity market law should take effect after the holidays at the latest," she said.

Last week, Poland's deputy energy minister, Grzegorz Tobiszewski, said the ministry planned to publish the framework of a capacity market bill before the summer holiday period.

Poland plans to introduce annual auctions for capacity to be delivered in four years' time, so a first auction in 2017 would be for capacity delivered in 2021.

Poland's proposals, currently in the pre-notification stage with the EC, follow the UK model which obtained EU approval.

Radzimowska said that, according to Polish utilities' estimates, the Polish electricity system would incur more than Zloty 420 billion ($108 billion) costs to adjust to the demands of EU climate policy to 2030, of which more than Zloty 70 billion pertained to conventional energy units' maintenance.